Kenya has struck a preliminary trade deal with China that would give 98% of its exports duty-free access to the large Chinese market, the Nairobi government said on Thursday, with a full, final agreement in the pipeline.

The East African nation has been forging closer ties with China, with President William Ruto making a state visit to Beijing last year during which a number of financing and cooperation agreements were signed.

"We have initiated discussions with China to negotiate a bilateral trade agreement," Kenya's trade ministry said in a statement, disclosing the talks for the first time. "These engagements have resulted in a preliminary agreement."

China's government did not respond immediately to a request for comment.

The deal stems from Beijing's move towards eliminating all trade tariffs applied to the 53 African states with which it has diplomatic relations, analysts said, announced last June in the wake of U.S. President Donald Trump's global tariff blitz.

"In order for this announcement to be WTO-compliant, middle-income countries like Kenya have to undertake bilateral trade agreements with China," said Hannah Ryder, founder of Development Reimagined, an Africa-focused consultancy.

The bilateral deals will eventually become reciprocal, she said, but African nations will get time to develop their economies so they can compete with China's industrial might.

YAWNING TRADE DEFICIT IN FAVOUR OF BEIJING

Kenya, East Africa's largest economy, had a trade deficit with Beijing of 549.82 billion shillings ($4.27 billion) in 2024, with exports to China totalling just 26.32 billion shillings and imports totalling 576.14 billion shillings.

The preliminary deal, reached last month after a round of negotiations kept quiet at the time, is technically known as an Early Harvest Arrangement, allowing for Kenyan goods' access to China while the full deal is hammered out.

"The introduction of zero-duty access will unlock vast economic potential for Kenyan exporters," the ministry said, adding that businesses will be able to export more agricultural produce, without stating the specific eligible products.

Past attempts to redress the trade imbalance between the two nations, including allowing the export of fresh Kenyan avocados to China in 2022, have not narrowed the gap.

JUGGLING PARTNERSHIPS WITH CHINA AND U.S.

Kenya is also a close ally of Washington and is negotiating a separate bilateral trade accord with the Trump administration, prompting recent reports in domestic media outlets that closer engagement with China could anger the U.S.

Officials have denied those reports.

"We see no tension between our concluding a market access arrangement with China on one hand, and our robust push for AGOA re-authorization as well as a separate bilateral trade agreement with the United States, on the other," Korir Sing'oei, principal secretary at Kenya's Foreign Ministry, posted on X this week.

Ruto has defended the rapprochement with China against criticism from some U.S. officials, saying Kenya has to export more goods to the huge Asian economy to close the trade gap.

China's economic ties with Kenya go well beyond trade. It is Nairobi's largest bilateral creditor, and both sides have agreed to convert the base currency of some of the loans from dollars to Chinese yuan to lower interest costs.